Indian consumers are reconsidering their buying priorities, choosing price, value, and packaging over age-old brand loyalty, finds the new India edition of the EY Future Consumer Index. The report finds that more than half (52 per cent) of consumers are turning to private label products—products owned and retailed by retailers—because they are an affordable substitute for traditional brands.
This change reflects a wider shift in consumer sentiment, with 70 per cent of them assuring that private labels fulfill their requirements equally well as popular brands. Just under half (47 per cent) indicate they would switch back to branded merchandise if it provides better quality, taste, or performance. While 44 per cent would switch for greater value, the same proportion are willing to pay more for proven differences in product performance.
Angshuman Bhattacharya, partner and consumer products and retail national leader at EY-Parthenon explained that although consumer taste has always changed along with shifts in the economy, today’s change seems more irreversible. He added that not only are retailers launching their own brands, they are also providing them top-shelf space. Meanwhile, digital technologies are improving the way consumers interact with products in the store.
The report points out how quickly retailers are shifting: 74 per cent of shoppers have seen an increase in the number of private label products available at their local stores, and 70 per cent note that these products are now more visible—often at eye level.
Cost sensitivity is a leading driver, with 69 per cent of shoppers admitting that private labels assist them in saving money. For comparison, when established brands try to deliver value by making adjustments to ingredients or formulations, 34 per cent of consumers view these adjustments as cost-savings instead of actual innovation.
Again highlighting price-conscious thinking, 59 per cent of them confess to purchasing branded items only when they are on offer, implying that discounts now outweigh brand names.
As private labels gain increasing popularity, Bhattacharya observes a concurrent growth in demand for new and alternative brands. For established players, the challenge is evident: they need to reimagine how they engage with consumers and innovate with authenticity if they are to remain relevant in an ever-changing retail environment.
